Singapore’s economy grew 2.9 per cent in the second quarter of 2024 from a year earlier, better than economists expected, preliminary government data showed on Friday.
The better than expected figure and an upwards revision to first quarter data to 3.0 per cent led economists to upgrade their gross domestic product (GDP) forecasts for the year. Singapore’s trade-dependent economy often functions as a bellwether for the economic health of Asia that belies its size.
Economists surveyed by Reuters had forecast annual GDP growth would come in at 2.7 per cent in the April to June period.
Maybank’s Chua Hak Bin revised his forecast to around 2.8 per cent-3 per cent for the full year, up from 2.4 per cent. OCBC chief economist Selena Ling changed hers to above 2.5 per cent from 2.3 per cent.
“The manufacturing recovery is gaining traction a bit earlier than expected in the second quarter rather than the second half of 2024,” Ling said.
On a quarter-on-quarter seasonally adjusted basis, GDP expanded 0.4 per cent in the second quarter, the data from the Ministry of Trade and Industry showed.
The manufacturing sector grew by 0.5 per cent in the second quarter, a reversal from the 1.7 per cent contraction in the previous quarter.
The advance second-quarter GDP data comes after the Asian financial hub registered its fastest growth in 18 months in the first quarter.
In May, the trade ministry maintained its economic growth forecast for 2024 at 1.0 per cent to 3.0 per cent.
Singapore’s GDP increased 1.1 per cent last year, slowing from 3.8 per cent in 2022.
While annual core inflation has fallen from a peak of 5.5 per cent in early 2023 to 3.1 per cent in recent months, it has remained stubbornly elevated and hit a seven-month high in February.
The Monetary Authority of Singapore, the city state’s central bank, uses the exchange rate as its primary interest rate policy tool and is scheduled to next review its policy settings later this month.
The central bank has left monetary policy unchanged for four consecutive meetings through to April.
